Changes of Organizational Structure and Culture at General Electric

General Electric Company, or GE established in 1892. The headquarter locates in Fairfield of United States. It has 301,000 employees as at Dec 2011 and with global business in more than 150 countries.

For over last decade, GE was operated in a mechanistic structure with great bureaucracy management. The company had slow incremental growth. As Jack Welch became the 8th Chairman and CEO of GE in 1981, he took in new business idea through innovation. The great change in GE was success. Its annual revenue got a big leap from only $26.8 billion in 1980 to nearly $130 billion in 2000.

3. Overall Planned Change Approach and Phases

With reference to the overall planned changed approach and phases led by Jack Welch, the main objective focused on “Speed, Simplicity and Self-confidence”. In order to achieve this objective, Welch firstly changed the organizational structure, and then the organizational culture in GE. Iceberg model (Appendix I) is used to explain what structure and culture are. For structure, it is in formal organization and visible, which indicates organizational feature that is easily understood and more relevant to planned changes. While culture is in informal organization and hidden, it refers that is difficult to grasp and substantial in organizational life.

Referring to GE case, Welch had implemented organic organizational structure by widening spans of control, removing several layers of hierarchy and reducing number of employees which created a flat structure and contributed an easily and efficient communication throughout the organization. As a result, GE’s employees were encouraged and willing to express their own opinions. That simplified and speeded up the GE’s decisions making and procedures. With changing from structure to culture, GE was able to achieve the objective by changing its own culture as the final outcome.

4. The Major Characteristic for GE’s Work-Out Program

The GE Workout program aims to achieve...